Pages

Thursday, November 4, 2010

FED holding of treasurys will surpass China AT THE END OF THE MONTH

As is all too well known by now, starting over the next few days, the Fed will commence purchasing $75 billion in Treasury securities monthly until the end of June, and will buy an additional $35 billion in Treasurys to make up for declining holdings of MBS (due to repurchases).

What is certain is that on June 30, the Fed's balance sheet will have $2.68 trillion (or more) in holdings, of which $1.77 trillion will be in Treasurys, compared to the $840 billion today. What is also certain is that the Fed will not be able to stop there. Which is why we have extended the projection period through January 2012. At that point the Fed will hold $2.6 trillion in US Treasuries, or roughly 25% of total US marketable debt at that point.

Incidentally, nowhere do we assume that the Fed will have launched QE 3, 4, and so forth, over the next 12 months, even though we now estimate the probability of America becoming an exponentially self-monetizing, Weimar-type case study in hyperinflation at over 50%.

Follow by Email for FREE. No Costs, Nothing, Nada

Search This Blog

AN IMPORTAN MESSAGE

Yes, your donations matter and help to support this blog! Thanks in advance.

Financial Balderdash and Its Global Audience

Disclaimer

This communication is being provided for informational purposes only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of any security referenced herein. It is being provided to you on the condition that it will not form the primary basis for any investment decision. The Kingsland Report and its authors may have positions (long or short) referenced herein. The Kingsland Report's primary authors are not registered investment advisors, brokers or dealers. The information contained herein is of the date referenced and The Kingsland Report and its authors does not undertake an obligation to update such information. The Kingsland Report has obtained all market prices, data and other information from sources believed to be reliable although its accuracy or completeness cannot be guaranteed. Such information is subject to change without notice. The securities mentioned herein may not be suitable for all investors.